**Formula: Multiply; Cell Referencing**---**Using Excel to Determine Ending Inventory****PROBLEM**In its first month of operations, McLanie Company made three purchases of merchandise in the following sequence:- **Purchase 1:** 300 units at $6.00- **Purchase 2:** 400 units at $8.00- **Purchase 3:** 500 units at $9.00McLanie uses a periodic inventory system. It also provided the following information:- Units on hand: 200---**Student Work Area****Required:** Provide input into cells shaded in yellow in this template. Use a cell referencing and mathematical formulas for calculations.1. Compute the cost of the ending inventory under the **FIFO** method: - Units: 200 - Unit Cost: $6.00 - Total Cost: $1,2002. Compute the cost of the ending inventory under the **LIFO** method: - Units: 200 - Unit Cost: $9.00 - Total Cost: $1,800---

There are several methods to calculate the value of ending inventory and LIFO and FIFO methods are…

Compute the cost of the ending inventory under the a. FIFO method FIFO Units Unit Cost Total Cost 200 $ 6.00 $ 1,200 Compute the cost of the ending inventory under the b. LIFO method LIFO Units 200 Unit Cost Total Cost $9.00 $1,800

Compute the cost of the ending inventory under the a. FIFO method FIFO Units Unit Cost Total Cost 200 $ 6.00 $ 1,200 Compute the cost of the ending inventory under the b. LIFO method LIFO Units 200 Unit Cost Total Cost $9.00 $1,800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

**Formula: Multiply; Cell Referencing**

---

**Using Excel to Determine Ending Inventory**

**PROBLEM**

In its first month of operations, McLanie Company made three purchases of merchandise in the following sequence:

- **Purchase 1:** 300 units at $6.00
- **Purchase 2:** 400 units at $8.00
- **Purchase 3:** 500 units at $9.00

McLanie uses a periodic inventory system. It also provided the following information:

- Units on hand: 200

---

**Student Work Area**

**Required:** Provide input into cells shaded in yellow in this template. Use a cell referencing and mathematical formulas for calculations.

1. Compute the cost of the ending inventory under the **FIFO** method:

- Units: 200
- Unit Cost: $6.00
- Total Cost: $1,200

2. Compute the cost of the ending inventory under the **LIFO** method:

- Units: 200
- Unit Cost: $9.00
- Total Cost: $1,800

---

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Determine the ending inventory amount by applying the lower of cost or market value to a. Each inventory item of inventoryb. Total inventory The following data refer to Froning Company’s ending inventoryItem Code, Quantity, Unit Cost, Unit MarketLXC 60 $45 $48KMT 210 $38 $34MOR 300 $22 $20NES 100 $27 $32